Shopify is a great place to start for those looking to bring their e-commerce ideas to life. This being said the most common first query people have is, do I need a business license to sell on Shopify, say, in California, New York, or anywhere in the world for that matter?
The answer, unsurprisingly, to most legal questions is not a flat yes or a flat no. Many factors come into play, including where you live, what kind of goods you sell, and how your business is structured. Iโm about to guide you deeper and help you with those pesky legal details concerning selling on Shopify.
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Is a Business License Required for Selling on Shopify?ย

Shopify itself does not ask you for any such license but one must understand that laws related to business vary at the local, state, and federal levels. There are some things worth noting regarding licensing:
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Location: Rules change view depending on where you are. Look up your city and state government websites for the specifics.
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Business Structure: License requirements can be minimal for sole proprietors, but when it comes to LLCs, more permits may be needed.
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Products You Sell: Extra permits may be required for specific products, such as food or cosmetics.
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Sales volumes: In several locations, the license is a requirement for those who make more than $20, 000 a month.
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Advertisement & Payment integration: In case you are promoting your product or making payments via a third-party payment like Stripe, some of the websites may need such business verification so that youโre able to produce the relevant company registration documents. Therefore, if you are a drop shipper in the UK or the US, you should get your company (LTD/ LLC) incorporated.
Why You Should Comply with Legal Requirements
Legislation is not just about escaping nasty trouble, it is actually beneficial for your business!
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Risk Reduction: The central element for most companies that abide by regulations is that their risks are lower, and their surprises are lower.
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Better image: If people invest in businesses that abide by the law, it means those people will trust you too.
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More profit: More barriers to entry such as fines and penalties are obstacles to an individualโs profit.
With proper knowledge of business licenses and compliance, you are very well on your way to success with your Shopify store. It is now time for you to step up, jump in, and make your ideal store a reality!
FAQs
Selling on Shopify sounds great however getting licensed to do business on Shopify can be quite tricky. Here are a few frequently asked questions that we can provide straightforward answers to:
Do I need a license to sell on Shopify?
Not necessarily! No, Shopify itself requires one; however, perhaps there are Additional State or City requirements. Kind of like a permit suggesting youโre allowed to sell.
How do I know if I donโt have a license?
Depends on 3 things:
- Your town: Local and state rules vary. Visit their sites for the best results.
- What you sell: Are you selling cafรฉ and toys? Probably need other permits as well.
- How much you sell: Some regions merely have a threshold where a license is only needed if that amount is considerably high (for instance: greater than $20 thousand per month).
Where can I check where I can find information regarding licensing?
Search for โbusiness licensesโ on your city or state’s web page. You can also call the SBA (Small Business Administration) atย https://www.sba.gov/.
Do drop shippers have to acquire specific licenses?
Perhaps. You may possibly have to acquire extra ones for tax or specific products.
Summing Up

So, in essence, we have comprehensively addressed the โDo you need a business license to sell on Shopifyโ. No, you are not required to have any license to sell on Shopify or any other e-commerce shop owing to the similar e-commerce nature. But, for any e-commerce business, dropshipping or selling your products, you must comply with your Country’s rules on regulating the trade.